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This discussion will be quite a bit dryer than what I usually strive for, but it serves a purpose.

During the National Prayer Breakfast on Thursday February 7, Dr Benjamin Carson made a radical new proposal to deal with health care issues in the United States. Here is what he said:

“When a person is born, give him a birth certificate, an electronic medical record, and a health savings account to which money can be contributed—pretax—from the time you’re born ’til the time you die.”

After pondering this idea and considering a few other issues our society is dealing with, I realized this idea could be expanded. Why not include education in Dr. Carson’s proposal. When a child is born, give him a medical savings account, but also give him an educational savings account. In fact, why not just combine them into one account. This account could be called a Personal Account for Social Savings (PASS). All the money the child is likely to need for health and education would go into this account and the child would, with parental guidance, pay for their medical and educational needs out of the account.

This account would be similar to a health savings account (HSA) or an individual retirement account (IRA). Anyone could contribute to the account tax free, but money could only be taken out for medical or educational needs until a person has reached the age of majority or the account has accumulated sufficient funds. After the account has accumulated sufficient funds, it would be treated like a severely restricted IRA.

Currently, an average child costs about $2300 per year in medical expenses and about $19,000 per year for public schooling. This would mean that all parties contributing to this account would need to contribute approximately $2300 per year over 18 years and $19000 per year over the 12 years that the child attends school. This comes to $269,400 over 18 years. There will, of course, be adjustments resulting from inflation, but those will be offset by other factors that I will get to later.

The $19,000 for education is already being paid and simply needs to be diverted to PASS accounts. The $2300 for medical care will come from the money employers and private citizens are already paying for medical insurance for children, and the money the federal government and the states are paying in Medicaid and CHIP for children. Simply get rid of all these expenses and adjust taxes to make up the difference. I suspect that these various methods of paying for children’s medical care will account for more than my plan calls for, but they will be at least enough.

The average child costs $19,000 per year to attend public schools, but they could attend a private school for $9900 per year. It is easy to make an argument that private schools are better than public schools. First, there is the free market argument. Students in public schools are often truant and allowed to slip through the system. Consider what would happen if a student at a private school was allowed to slip through the system. Why would any parent write a check to a school that is neglecting their child? Second, there is actual evidence that private schools are better. Due to the political implications, I strongly suspect that the superiority of private schools is downplayed by all but the most conservative studies, but the evidence of an NAEP study is substantial. Third and finally, there is anecdotal evidence. My own niece was neglected and mistreated in her elementary school, junior high school, and high school. She was well on her way to becoming a social outcast and an academic failure. Her parents took the big step and paid the money to send her to a private school. It turned her life around. Instead of being a failure, she is a successful young business woman.

Why are we paying $9100 extra per school year to send our students to inferior schools?

I am not proposing that students receive less money for school. Instead, we should go ahead and give them that money and allow it to accumulate in their PASS accounts. After deducting for expenses, $9100 could be placed in an average student’s PASS account every year for 12 years. Assuming this money can be invested at a modest but reasonable return of 10%, the student would have nearly $200,000 in their account by the age of 18. This is money that the student could use to attend college.

There is another important consideration. There is a real possibility that by the year 2030 there will be no such thing as a job. Basically computers and robots will be doing everything. First, they will take over the obvious jobs like telephone helplines where the people on the other end offer purely verbal assistance. Systems like IBM’s Watson are well on their way to accomplishing this.

The robot revolution is rapidly creating what has been called a “lights out factory”. However, robots will also take over less obvious jobs like driving taxis and buses Eventually, they will take over construction jobs. By 2030, there may simply be nothing left for humans to do.

With our present system, millions of youth are likely to arrive at the age of majority with zero prospects for finding work and absolutely nothing to fall back on. The idea has been proposed that these people be put on some kind of dole system like permanent welfare, but this will result in a race of sulky dependents. How much better would it be if all of our young people arrived at the age of majority with $200,000 to their name? If markets take off like they should be expected to when human labor has been completely eliminated, everyone will be an entrepreneur with a bright future ahead of them. The extra growth should more than compensate for the aforementioned inflation. The competition engendered by having people pay for their own medical and school expenses could make a much larger difference. The most important consideration is the people: instead of being sulky welfare dependents, they will be active participants in the new economy of pure leisure and investment. They will be buying and selling shares in industries that are mining asteroids and preparing humanity for the great expansion into the rest of the universe.

The recipients of PASS accounts would keep them and continue to contribute to them for the rest of their lives. Eventually, as these recipients grow older, Social Security, Medicare, and Medicaid can be eliminated entirely…along with countless other programs that foster dependence and wreak havoc on our federal budget.

There are obvious financial advantages to this plan, but the less obvious advantages may actually make more difference. People with $200,000 in the bank do not rob filling stations and fill up prisons. Society as a whole could save billions of dollars just through reduction in crime.

There are two immediate objections to the ideas I have proposed.

First, a savings account is not the same as medical insurance. The idea behind insurance is that everyone pays a little and if anyone has catastrophically bad luck the unlucky individual benefits from everyone’s contribution. Of course, medical savings accounts are already an established institution, and they work very well. However, in case some young person has unusually large medical bills, the government could simply make them a low interest loan against the $200,000 they are expected to have when they reach the age of majority. They may not arrive at the age of majority with the financial advantage of their more fortunate counterparts, but they will at least arrive, and there will be other opportunities.

The second immediate objection is that $200,000 is not enough to live on indefinitely. A modern person who lives modestly might be able to stretch this money out to ten years. However, there is good reason to believe that the cost of a modest lifestyle will be considerably less in 2030. First of all, we will have 3D printing of almost everything using materials that most people would throw away. Also, there is likely to be very cheap power. New methods of generating and storing power are on the horizon that might actually make the average person energy independent. Dramatic improvements in solar power and batteries are announced every day. If a person of 2030 can manage to live on $20,000 per year, the return on their $200,000 will compensate. However, that is a worst case scenario. In a world where no one has to work and the only limit on industry is imagination, I would expect everyone to do much better.

Now, realistically, a plan like the one I have devised will never be adopted. There is no possibility of getting rid of our deeply entrenched public school system. The unions are too powerful. Also, there is no possibility of eliminating any of our social programs or preventing new ones from being created. We have leaders who get elected by promising strait-forward, easy to understand giveaway programs and the simple people who vote for them have acquired a taste for strait-forward, easy to understand giveaway programs. The demographics of the United States are shifting in the direction of people who have never thought of striking out on their own and creating their own business or accumulating capital to invest. I am proposing a nation of entrepreneurs. Our media and our schools are cultivating a nation of hangers on.